APM Companion Paper Formatted FINAL

7/25/2019 APM Companion Paper Formatted FINAL

1/11

VERMONT ALL-PAYER MODELTERM SHEET PROPOSALCompanion Paper

Vermont Agency of Administration

Green Mountain Care Board

January 25, 2016


2/11

2

Table of ontents

OVERVIEW 3

WHY DO HEALTH CARE PAYMENTS NEED TO CHANGE? 4

WHAT IS AN ALL-PAYER MODEL AND WHY ARE WE PROPOSING IT? 5

WHAT IS VERMONT PROPOSING IN THE DRAFT TERM SHEET? 6

MEDICARE BENEFICIARY PROTECTIONS 6STATEWIDE FINANCIAL TARGETS 7REGULATED SERVICES 7STATEWIDE QUALITY TARGETS 7PAYMENT &DELIVERY SYSTEM REFORMS 8VERMONT BLUEPRINT FOR HEALTH AND SERVICES AND SUPPORTS AT HOME (SASH) 8EXPANSION OF MEDICARE SERVICES 8

ADDITIONAL

EXPANSION OF

MEDICARE

SERVICES

9PATHWAY FOR INTEGRATION OF MENTAL HEALTH AND SUBSTANCE ABUSE SERVICES AND LONG TERM SERVICESAND SUPPORTS 9

HOW WILL THE TERM SHEET BE EVALUATED? 10


3/11

3

Overview

Vermonts Legislature directed the Green Mountain Care Board (GMCB) and the Agency

of Administration (AOA) to jointly explore an all-payer model.1An all-payer model is an

agreement between the State and the Center for Medicare and Medicaid Services (CMS)

that allows Vermont to explore new ways of financing and delivering health care. The

all-payer model enables the three main payers of health care in VermontMedicaid,Medicare, and commercial insurance, to pay for health care differently than through

fee-for-service reimbursement.

In an all-payer model, Vermonters will have the same choice of providers as they have

today under Medicare, Medicaid, and commercial insurance. Benefits will not be

reduced. By contrast, Medicare beneficiaries may have access to, and coverage for, new

services not covered by Medicare today.

The GMCB and AOA have jointly explored an all-payer model through dialogue and

negotiation with CMS. The result of this dialogue, and consultation with stakeholders

and consultants, is a term sheetproposed by the State of Vermont to CMS that broadly

reflects a policy framework to enable the waivers of federal law necessary to operate an

all-payer model.

1Act 54 of 2015.


4/11

4

It is unusual to divulge the negotiating position of a party in the middle of a negotiation;

however, the GMCB and AOA are circulating the term sheetand this companion paper

to ensure maximum transparency and seek input. Neither this white paper nor the

proposed term sheet represent a binding commitment on the part of Vermont or the

Federal government. Furthermore, the term sheet may evolve as it works its way

through both the state and federal clearance processes. All materials should beconsidered preliminary until a final agreement is potentially reached later this year. If

Vermont decides the final agreement is not better than todays system, it can end the

negotiation. Similarly, if CMS is not satisfied that the overall proposal meets its policy

and financial goals, it can decline to enter into the agreement.

The paper seeks to answer four key questions important to Vermonters:

Why do health care payments need to change?

What is an all-payer model and why are we proposing it?

What is Vermont proposing in the draftterm sheet

?

How will the term sheet be evaluated?

Why do health care payments need to change?

Vermont families are struggling to afford health care today. This problem will grow

worse over time if health care costs continue to grow faster than income and the

economy.

Health care is expensive. When the fee-for-service health care payment model was

devised over 50 years ago, the average life expectancy of Americans was significantly

shorter than it is today, and the burden of chronic disease was smaller. The Centers for

Disease Control and Prevention (CDC) reports that treating people with chronic diseases

accounts for 86 percent of our nations health care costs. Health care reimbursement

was designed to pay for acute medical conditions that required a single visit to the

doctor or a single hospitalization. By contrast, persons with chronic conditions require

regular, ongoing care across the continuum of traditional medical services and

community-based services and supports. Fee-for-service reimbursement makes it

difficult for innovative health care providers to adapt to the changing needs of the

population that they serve. The antiquated system provides clear financial incentives to

order additional tests and procedures, yet it does not reward doctors and other healthcare professionals for providing individualized and coordinated care for complex chronic

conditions. In the end, patients may receive care that is expensive, fragmented, and

disorganized.

A new, all-inclusive population-based model of reimbursement rewards health care

professionals that are adapting to the changing needs of the population. In this model


5/11

5

doctors and other health care professionals are freed from restrictive reimbursement

policies and the silos of care that these policies create. Doctors and other health care

providers are empowered to deliver the care that they know to be most effective in

promoting and managing the health of the population that they serve. Positioning

health care providers to lead health care delivery change creates a more holistic

approach to patient care and is at the heart of the all-payer model proposal.

The federal government recognizes that the fee-for-service payment system is a

mismatch for evolving health care needs and goals for population health improvement.

CMS has created multiple opportunities to pay for value rather than volume in health

care, encouraging providers to invest in the collaborative and well-coordinated care that

they know to be best for their patients. For example, Vermont has received $45 million

in State Innovation Model (SIM) funds to encourage transformation in how we pay for

health care services to make health care more affordable and accessible, while

maintaining high quality standards. Additionally, the federal government has created

programs that encourage the use of Accountable Care Organizations (ACOs). ACOs are

health care provider led organizations accountable for cost and quality of care and agree

to be paid in a way different than standard fee-for-service.

CMS has doubled down on this approach, committing to paying for 80% of its services in

alternatives to fee-for-service by 2018. Furthermore, CMS has created the Next

Generation ACO program, which creates the opportunity for Vermont and others to

explore how a truly integrated health care system would work.

What is an all-payer model and why are we proposing it?

The CMS Next Generation program allows ACOs to be paid in a different way by

Medicare. ACOs could receive an all-inclusive population-based payment for each

Medicare beneficiary attributed to the ACO. CMS would allow ACOs some flexibility in

certain payment rules in exchange for accepting this new type of payment. Medicare

will continue to pay providers directly and all of its patient protections stay in place. The

CMS Next Generation program creates a new opportunity for Vermont to align

Medicare, commercial, such as Blue Cross Blue Shield of Vermont, and Medicaid

payments.

In Vermonts proposal, the all-payer model is about getting commercial insurers andMedicaid to pay the same way Medicare will be paying for health care under its Next

Generation program. The proposal is for all payers to approach health care payment to

ACOs in a common way and for all payers to give doctors and other health care

professionals the flexibility they need to lead health care delivery change. Different

rules, standards, and methods of payment across major payers creates inefficiencies

and unnecessary administrative costs, while under an all-payer model providers and

patients can be served by a more coordinated system that is structured to align quality


6/11

6

goals and reduce costs. The State would agree to coordinate with Medicaid and

commercial insurers, and in return the federal government would allow Medicare to

participate in the ACO value-based payment model. As is true today, health care

providers participation in ACOs is voluntary; the ACO must be attractive to providers

and offer an alternative health care delivery model that is appealing enough to join.

This model builds off federal and state health care reform efforts that have value-based

payment components today. The Blueprint for Health, for example, provides an

essential foundation for enhancing and supporting primary care in an all-inclusive

population-based payment model. In 2014, Vermont created an all-payer Shared

Savings Program (SSP) for ACOs. Starting with the Medicare SSP, Vermont modeled and

aligned a Medicaid SSP program and a commercial SSP program offered by Blue Cross

Blue Shield of Vermont. Again, the state will leverage this experience to move from fee-

for-service with shared savings to an all-inclusive population payment with quality

incentives across Medicare, Medicaid, and commercial insurers using the Next

Generation model parameters, adapted for Medicaid and commercial insurers where

needed. This model is intended to shift financial accountability for efficiency and quality

of care to provider organizations.

What is Vermont proposing in the draft term sheet?

The AOA and the GMCB have released a draft term sheet, which is a description of

Vermonts proposal to the federal government. The term sheet contains the elements of

a non-binding proposal for an all-payer model that Vermont and CMS identified through

iterative discussions. The term sheet is a framework for a potential agreement, but is

not an agreement.

The term sheet sets out the basic outline for a potential all-payer model agreement,

including the legal authority of the state to enter into such an agreement, the

performance period for the agreement, waivers necessary to facilitate payment change

and additional covered services, a plan for data sharing, and an evaluation of the

demonstration. Central elements of the proposal are highlighted below:

Medicare Beneficiary Protections

Medicare beneficiaries access to care and services and providers will not be limited

under the all-payer model. Specifically, Medicare beneficiaries in Vermont will: Retain full freedom of choice of providers and suppliers, as well as all rights and

beneficiary protections of Medicare.

Retain coverage of the same care and services provided under Medicare today.

Medicare beneficiaries will not experience any reductions in benefits or covered

services under the all-payer model.


7/11

7

Vermont may seek benefit enhancements that will directly improve beneficiary

access to care and services.

Statewide Financial Targets

At the heart of the proposal to CMS is a statewide financial target for certain health care

services across Medicare, Medicaid, and commercial insurers. The goal of this financialtarget is to bring health care spending closer to economic growth. When health care

costs grow faster than Vermonts economy, Vermont families find their premiums rising

faster than wages. This is also true in the states Medicaid budget, which grows faster

than the revenue sources used to fund it.

Over the course of the five-year agreement, the term sheet proposes a statewide

spending target of 3.5% with a maximum spending growth of 4.3%, which is about 1%

above the 15-year average for Vermonts gross state product.

The term sheet proposes that Medicare will grow more slowly than the national averagein Vermont. The term sheet proposes to reduce growth in Medicare costs by .2% off of

the national trend for services covered by the agreement at the end of the 5 years.

Regulated Services

These financial targets are calculated using the health care services currently included in

the shared savings programs, although Vermont has the option under the agreement to

expand these services for Medicaid. The proposal includes a commitment to develop a

path to ensure that services not subject to the financial targets, such as mental health,

substance abuse, and long term services and supports, are part of an integrated

provider network and eligible to receive funding as part of an ACO network. The

proposal does not restrict spending on mental health, substance abuse, and long term

services and supports. Critical to the success of the model is the integration of and

emphasis on community-based services and supports not traditionally unified with

medical services. Additional investments to allow the care continuum to better provide

substance abuse and mental health services may save costs by keeping Vermonters

healthier and out of the hospital.

Statewide Quality Targets

The State is proposing three ambitious, population health goals, which are derived from

the States Health Improvement Plan created by the Vermont Department of Health.

Vermont will establish population health measures for the State that will be monitoredand evaluated over the course of a potential demonstration agreement. Population

health goals include:

Increasing access to primary care.

Reducing the prevalence of and improving the management of chronic diseases.

Addressing the substance abuse epidemic.


8/11

8

Vermont will identify existing claims and clinical measures that will help it achieve its

broader goals. In addition to these high level goals, the proposal indicates that the

GMCB would establish statewide quality measures for the ACO based on the measures

currently required in the shared savings programs. ACOs will be held accountable for a

wide range of quality measures through a coordinated and consolidated measurement

strategy. Just as today, the ACOs performance on the identified measures will impactitsall-inclusive population payment.

Payment & Delivery System Reforms

Vermont Blueprint for Health and Services and Supports at Home (SASH)

The Blueprint for Health currently includes Medicare payments to its medical homes

and community health teams (CHTs) through a demonstration agreement with

Medicare that expires at the end of this year, 2016. The State proposes to continue and

enhance Medicare participation through the all-payer model agreement. Absent this

agreement, Medicare will no longer participate in the Blueprint for Health and the

payments will be discontinued by the federal government.

Vermont proposes to expand Medicares participation in the successful and proven

Supports and Services at Home (SASH) program. SASH is a partnership between

affordable housing providers, Area Agencies on Aging, Home Health agencies, Mental

Health and Developmental Services agencies, Blueprint Medical Homes (and CHTs) and

local hospitals. The SASH model provides both individualized and population-based

service and supports to Vermonts most vulnerable adults, primarily those on Medicareliving in congregate non-profit owned and/or managed affordable housing.

Expansion of Medicare Services

Vermont proposes to expand Medicare services to Vermont seniors through the all-

payer model by allowing an ACO to provide care differently than is currently allowed

under Medicare. By allowing additional flexibility in certain areas, health care providers

will be able to better care for seniors in the following specific circumstances:

Three Day Skilled Nursing Facility Rule: This waiver removes the requirement

that Medicare beneficiaries have a three-day stay in the hospital before beingadmitted to a skilled nursing facility to ensure Medicare payment for the skilled

nursing facility.

Telehealth Rule Waiver: Telehealth is currently limited to rural health

professional shortage areas. This waiver removes restrictions and allows

beneficiaries to receive telehealth services in their homes, whether they are in a

rural area or not.


9/11

9

Post-Discharge Home Visits: Today Medicare beneficiaries can receive a post-

discharge home visit when they return home from a hospital stay. This waiver

eliminates the direct supervision by a physician requirement and allows the ACO

to contract with other licensed clinicians to provide a home visit.

Additional Expansion of Medicare Services

Medicare currently does not participate in Vermonts Hub and Spoke opiate addiction

treatment program. Vermont proposes that Medicare begin participating in this

program in order to ensure that the model addresses the substance abuse needs of

Vermonts seniors.

The term sheet proposal also describes Vermonts interest in obtaining additional

waivers to facilitate care delivery transformation in the State and enhance the services

that Medicare beneficiaries can receive. Throughout the term of the agreement,

Vermont will specifically consider whether and how to expand the scope of practice forNurse Practitioners in Medicare, how to improve the coverage of long term services and

supports to enable more continuity of care, and earlier access to the hospice benefit.

Pathway for Integration of Mental Health and Substance Abuse Services and Long Term

Services and Supports

Vermont proposes to continue to work with mental health, substance abuse, and long

term services and support providers to determine the best path forward to create an

integrated health care system. Specifically, the State intends to facilitate a process that

sets forth specific steps, analyses, and milestones that will result in an understanding ofhow payment and delivery system reform could progress for these providers whether

they are paid by Medicaid or an ACO. Currently, through the Vermont Health Care

Innovation Project (VHCIP), funded with the SIM grant, the Agency of Human Services

and VHCIP staff are working with several of these providers on payment reforms.

Examples include:

Expanding the integrated family services program, which currently provides

more flexible funding for children with special health needs;

Simplifying the structure and administration of the services offered by the

designated agencies to provide more flexible funding and streamlined care toimprove the availability of mental health and developmental disability services.

Implementing prospective payments for home health agencies, which is on track

to begin in July 2016.

The state is committed to working with providers of these services to ensure integration

of care across different types of health care providers. If it makes sense, at some point

in the future, these services could be included in the financial targets. At this point in


10/11

10

time, however, there is concern that these service providers may be underfunded and

limiting future funding would not improve services. Exclusion from the funding target

would not limit the ability of these service providers partnering with an ACO to be

included in the population based payment to the ACO or to otherwise work together to

integrate care for Vermonters while maintaining independent payment models.

How will the term sheet be evaluated?

As stated earlier, the term sheet is a non-binding proposal from the State of Vermont to

the federal government for an all-payer model facilitated by necessary waivers to allow

Medicares participation. The term sheetsets out the basic outline for a potential all-

payer model agreement, but is not an agreement. Major elements of the term sheet

include Medicare beneficiary protections, statewide financial targets, statewide quality

improvement goals, regulated services, and potential expansions of Medicare covered

services. The term sheet also lays out the legal authority of the State to enter into a

potential waiver agreement, the performance period for the agreement, waivers

necessary to facilitate payment change, a plan for data sharing, and an evaluation of the

demonstration.

To determine if the policy framework represented in the term sheet proposal benefits

the State of Vermont, the term sheet must be evaluated from multiple points of view

including but not limited to:

Patients;

Medicare beneficiaries;

Medicaid beneficiaries; Commercial insurance enrollees;

Uninsured Vermonters;

Health care providers;

Providers of community-based services and supports;

Health care payers: Commercial and Medicaid;

Legislators; and

Businesses.

To gather these points of view, the following will occur:

The term sheet will be made available to the public through distribution to themedia and posting on the Agency of Administration and Green Mountain Care

Boards websites:

o www.gmcboard.vermont.gov

o http://hcr.vermont.gov/home

The term sheet will be distributed to Legislators.
http://www.gmcboard.vermont.gov/http://www.gmcboard.vermont.gov/http://hcr.vermont.gov/homehttp://hcr.vermont.gov/homehttp://hcr.vermont.gov/homehttp://www.gmcboard.vermont.gov/


11/11

11

The Green Mountain Care Board will hold open, public meetings to discuss and

evaluate the term sheet.

A formal public comment period on the term sheet will be initiated by the Green

Mountain Care Board.

The Agency of Administration will accept public comments at

http://hcr.vermont.gov/home.

Taking all points of view into consideration, the Green Mountain Care Board and the

Agency of Administration must independently assess the all-payer model proposal. The

evaluation will reflect the multi-faceted proposal for a new health care delivery model.

For example, the Green Mountain Care Board must assess the financial terms laid out in

the proposal as well as the parameters it has to work within to implement and govern

the model responsibly. In its entirety, the evaluation of the proposal will assess the

potential of the all-payer model to build a system that offers the right incentives and

rewards providers for delivering on the promise of integrated, coordinated, high quality

care.

At the conclusion of this evaluation, the Green Mountain Care Board and the Agency of

Administration will determine whether and how the all-payer model proposal should be

adjusted to reflect stakeholder input. If the evaluation does not find the proposal to

have potential to meet such goals as reducing the rate of growth in health care

spending, improving access to high quality health care, maintaining the ability to recruit

and retain health care professionals, building a more integrated health care system

inclusive of the care continuum, and to be of economic benefit to the state, the Board

and Agency of Administration will end the negotiation with CMS.
http://hcr.vermont.gov/homehttp://hcr.vermont.gov/home

APM Companion Paper Formatted FINAL

Documents

Transcript of APM Companion Paper Formatted FINAL